Oil Report

Energy ministers to meet amid Europe's gas crisis

BRUSSELS, Jan 11 (Reuters) - European Union energy ministers will meet in Brussels on Monday to seek ways to shield their countries from a repeat of the mid-winter energy crisis sparked by Russia’s decision to cut gas supplies via Ukraine.

Moscow, Kiev and the EU struck a monitoring deal on Sunday which could see Russian gas flowing to Europe by Tuesday, but with Ukraine still locking horns with Russia over the price of supplies, Europe’s troubles could still flare up again.

“The crisis won’t be solved until there is a stable agreement between Russia and Ukraine,” said Ferran Tarradellas Espuny, the European Commission’s energy spokesman.

Energy ministers at the Brussels meeting are likely to focus on strategies to tackle future crises such as an “energy solidarity” agreement, by which countries could call on neighbours to top-up supplies in times of trouble.

During this month’s crisis, Austria and Italy helped out Slovenia, while Germany and Hungary came to the aid of Serbia. Britain, Norway, the Netherlands, Romania and Poland all boosted gas production to maximum levels.

But the “energy solidarity” concept is hampered by a lack of linkages, with Bulgaria unable to call on its European neighbours for help during the current crisis because it has no gas interconnections with them.

A plan announced last year to link the gas networks of eight central and southeast European countries, including Bulgaria, is likely to receive fresh attention on Monday.

But even once the infrastructure is built over several years, few European countries have much gas to spare.

“We are touching the limit of European solidarity at the very moment when it should come into force,” said a senior French official.

The EU’s Czech presidency is also likely to use the meeting to push forward the $12 billion Nabucco project, which might one day carry 30 billion cubic metres of Caspian or Middle Eastern gas annually via a southern route to an Austrian hub.

“We are planning to call a very high meeting here during the spring with both transit countries like Ukraine and Turkey, but also with countries that are the source of natural gas,” said Czech Deputy Prime Minister Alexandr Vondra.

The project is one of the top priorities for the Czech Republic during its six month presidency of the EU.

However, high-profile schemes to diversify the EU’s energy supplies, such as more ports for liquefied gas, the NordStream pipeline from Russia and the Nabucco pipeline, are still many years from fruition.

“That will take at least 10 years, but even then, all it will do is satisfy the increase in demand of Europeans,” said the French official.

France is keen to promote the controversial issue of nuclear power, on which Europe is widely split.

Slovakia announced its intention last week to restart a unit of the Soviet-era Bohunice plant to bolster energy supplies, worrying its neighbours. The ageing unit was shut down late last year as part of Slovakia’s terms for joining the EU.